Name: FARHEEN BEGUM

SRN: 202200535
Course: Direct Tax and Compliances
Course Teacher: Ms. Vaishali Sahoo
MBA – 2nd year 3RD SEM
Topic: Components of Income from Salary & Steps to
file ITR
Concept of Income from Salary:

Income from salary refers to the money an individual earns as

compensation for their employment. It is one of the common sources
of income for many people and includes the regular payments made
by an employer to an employee for their work. Here are some key
concepts related to income from salary:

Income under the head Salaries

1.1 Salary is defined to include:
a) Wages
b) Annuity
c) Pension
d) Gratuity
 e) Fees, Commission, Perquisites, Profits in lieu of or in addition to
Salary or Wages
f) Advance of Salary
g) Leave Encashment
h) Annual accretion to the balance of Recognized Provident Fund
i) Transferred balance in Recognized Provident Fund
j) Contribution by Central Government or any other employer to
Employees Pension Account as referred in Sec. 80CCD

1. Basic Salary: This is the fixed portion of your salary and forms the
foundation for other components.

2. Dearness Allowance (DA): It's an allowance to offset the impact of

inflation on your basic salary. It's usually a percentage of your basic
salary.

3. House Rent Allowance (HRA): If you live in a rented house, HRA

is provided to cover your rent expenses. The amount varies based on
your salary and location.

4. Conveyance Allowance: This is to cover your commuting expenses.

It's a fixed amount.
5. Special Allowances: These are additional allowances that might
vary from one employer to another. They can include things like
medical allowances, entertainment allowances, or any other specific
needs.

6. Bonuses and Incentives: These are often performance-based and

can vary from year to year.

7. Provident Fund (PF): A portion of your salary goes towards your

PF account, which is a retirement savings scheme.

8. Gratuity: It's a lump-sum payment made by the employer to the

employee upon completing a certain number of years in service.

9. Stock Options or RSUs: In some cases, employees receive stock

options or restricted stock units as part of their compensation.

10. Other Perks: Some companies offer additional perks such as

health insurance, gym memberships, or meal allowances.
What is an ITR?
An income tax return(ITR) is a document that you file with the
government. This return informs the government about your income,
investments and the tax payable.
Filing Income Tax Return (ITR) in India involves several steps,
including choosing the appropriate ITR form, gathering necessary
documents, calculating taxable income, claiming deductions, and
submitting the return to the Income Tax Department. Additionally, it's
essential to stay updated with the latest guidelines and changes in tax
laws. As of my last knowledge update in September 2021, here's a
detailed guide to help you through the process:

Step 1: Choose the Correct ITR Form

I. Identify Your Category: Determine your category of taxpayer
(individual, HUF, company, etc.).
II. Choose the Relevant ITR Form: Based on your income sources
and category, choose the appropriate ITR form:

 ITR-1 (Sahaj): For individuals having income from salary, one

house property, and other sources (excluding income from
business or profession).
 ITR-2: For individuals and HUFs not having income from
business or profession.
 ITR-3: For individuals and HUFs having income from business
or profession.
 ITR-4 (Sugam): For individuals, HUFs, and firms (other than
LLP) having a presumptive business income.
 ITR-5: For persons other than individuals, HUF, company, and
persons filing Form ITR-7.
 ITR-6: For companies other than companies claiming exemption
under section 11 (charitable and religious trusts).
 ITR-7: For persons including companies required to furnish
return under sections 139(4A) or 139(4B) or 139(4C) or
139(4D).
Step 2: Gather Necessary Documents and Information
I. Personal Details:
 PAN (Permanent Account Number)
 Aadhaar card
 Bank account details

II. Income Details:

 Salary slips and Form 16 (for salaried individuals)
 Details of income from other sources (interest, rental income,
etc.)
 Form 26AS (to cross-verify tax deducted at source)

III. Investment and Deduction Details:

 Receipts and details of investments under Section 80C, 80D,
80G, etc.
 Home loan interest certificate (if applicable)

IV. Business/Profession Details:

 Profit and loss account, balance sheet, and audit reports (if
applicable)

Step 3: Calculate Taxable Income

I. Income Computation:
 Calculate your total income from various sources.

II. Deductions and Exemptions:

 Subtract eligible deductions under various sections (e.g., 80C,
80D, 80G) from the total income.
III. Taxable Income Calculation:
  Calculate taxable income by subtracting deductions from the
total income.

Step 4: File ITR Online

I. Visit the Income Tax Department's Official Website:
 Go to the official Income Tax e-Filing portal
(https://www.incometaxindiaefiling.gov.in/).

II. Log In or Register:

 If you are a new user, register yourself and create an account. If
you're a returning user, log in using your credentials.

III. Select the Appropriate ITR Form:

 Choose the correct ITR form based on your category and
download the utility to fill the form offline.

IV. Fill and Verify the Form:

 Fill in the required details, verify the information, and cross-
check for accuracy.

V. Generate and Upload XML File:

 Generate an XML file of the completed ITR form using the
utility and save it to your computer.

VI. Upload the XML File:

 Log in to the e-Filing portal, click on 'Upload XML,' and upload
the generated XML file.

VII. E-Verify or Send Signed ITR-V:

  E-verify the return using various options like Aadhaar OTP, net
banking, or sending the signed ITR-V to the Centralized
Processing Center (CPC) within 120 days of e-filing.

Step 5: Post-Filing Actions

I. Acknowledgment and Verification:
 Receive an acknowledgment from the Income Tax Department
once the return is successfully filed.

II. Process of ITR by IT Department:

 The Income Tax Department will process the return and assess
the tax liability.

III. Intimation or Scrutiny:

 You may receive an intimation for any discrepancies or undergo
scrutiny by the tax department.

IV. Payment of Taxes:

 If additional taxes are due, pay them within the stipulated
timelines to avoid penalties and interest.
 Conclusion
 In conclusion, the Individual Tax Return (ITR) procedure is a
fundamental aspect of financial responsibility and civic duty for
taxpayers.
 Completing an ITR involves gathering financial information,
accurately reporting income, claiming deductions and credits,
and submitting the return within the specified deadlines.
 Filing taxes accurately not only helps individuals avoid penalties
and legal issues but also ensures that the government can
effectively collect revenue to fund essential services and
programs.
 In summary, the ITR procedure is an essential aspect of financial
responsibility and contributes to the functioning of a country's
economic system.
 Understanding and following the ITR process is crucial for both
individual financial well-being and the overall functioning of
society.

THANKYOU